Fortress Biotech(FBIO) - 2025 Q2 - Quarterly Results

Executive Summary Fortress Biotech reported significant progress in Q2 2025, highlighted by the monetization of its subsidiary Checkpoint Therapeutics for approximately $28 million upfront, the FDA's priority review of CUTX-101 for Menkes disease with a PDUFA goal date of September 30, 2025, and the commercial launch of Emrosi™ for rosacea - Fortress's subsidiary, Checkpoint Therapeutics, was acquired by Sun Pharma, providing Fortress with approximately $28 million at closing[1][4] - The acquisition deal includes potential future payments, including up to an additional $4.8 million under a contingent value right (CVR) and a 2.5% royalty on future net sales of UNLOXCYT™[1][6] - The FDA accepted the New Drug Application for CUTX-101 to treat Menkes disease for priority review, with a PDUFA goal date of September 30, 2025[1][3] - The commercial launch of Emrosi™ for treating inflammatory lesions of rosacea in adults has been initiated[2][3] Recent Corporate Highlights The company executed on key strategic initiatives, including the successful sale of Checkpoint Therapeutics, securing regulatory milestones like FDA priority review for CUTX-101 and Orphan Drug Designation for MB-101, and advancing commercial efforts for Emrosi™ with expanded payer coverage Monetization Updates Fortress monetized its investment in Checkpoint Therapeutics through an acquisition by Sun Pharma, providing immediate non-dilutive capital of approximately $28 million with potential future revenue streams from a CVR and royalties on UNLOXCYT™ sales Checkpoint Therapeutics Acquisition Terms | Component | Value | | :--- | :--- | | Upfront Payment | ~$28 million | | Contingent Value Right (CVR) | Up to $4.8 million | | Royalty | 2.5% on future net sales of UNLOXCYT™ | Regulatory Updates The company achieved positive regulatory developments, including FDA priority review for CUTX-101 for Menkes disease with a PDUFA goal date of September 30, 2025, and Orphan Drug Designation for MB-101 for high-grade gliomas - The FDA accepted the NDA for CUTX-101 (copper histidinate for Menkes disease) for priority review, with a PDUFA goal date of September 30, 2025. Fortress's subsidiary, Cyprium Therapeutics, will retain 100% ownership of any FDA Priority Review Voucher that may be issued upon approval[12] - In July 2025, the FDA granted Orphan Drug Designation to Mustang for MB-101 (IL13Ra2-targeted CAR T-cells) for the treatment of recurrent diffuse and anaplastic astrocytoma and glioblastoma[12] Commercial Product Updates Journey Medical's net product revenue remained stable at $15.0 million year-over-year, with Emrosi™ achieving significant payer coverage expansion to over 100 million commercial lives by July 2025 - Journey Medical's net product revenues for Q2 2025 were $15.0 million, compared to $14.9 million for Q2 2024[12] - The full commercial launch for Emrosi™ began on April 7, 2025, following initial distribution in late March 2025[12] - Payer access for Emrosi™ expanded significantly, covering over 100 million commercial lives in the U.S. as of July 2025, up from 54 million in May 2025[12] Clinical Updates AstraZeneca's Phase III CARES program for anselamimab in AL amyloidosis patients did not meet its primary endpoint, though it showed clinically meaningful improvement in a prespecified subgroup - AstraZeneca's Phase III trial for anselamimab (formerly CAEL-101) did not achieve statistical significance for its primary endpoint in treating AL amyloidosis patients[12] - Despite missing the primary endpoint, the drug demonstrated clinically meaningful improvement in a prespecified subgroup and was well-tolerated, with AstraZeneca planning to share the full data with health authorities[12] General Corporate Updates Fortress's partner company, Journey Medical, was added to the Russell 2000® Index and Russell 3000® Index in June 2025, enhancing its investment community visibility - Journey Medical was added to the small-cap Russell 2000® Index and the broad-market Russell 3000® Index, effective after market close on June 27, 2025[10] Financial Results Fortress reported a significant turnaround to a net income of $13.4 million for Q2 2025, driven by a $27.1 million gain from Checkpoint deconsolidation, with consolidated net revenue reaching $16.4 million and cash growing to $74.4 million Q2 2025 vs Q2 2024 Key Financials | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change | | :--- | :--- | :--- | :--- | | Consolidated Net Revenue | 16.4 | 14.9 | +10.1% | | R&D Expenses | 8.1 | 12.7 | -36.2% | | SG&A Costs | 38.8 | 20.8 | +86.5% | | Net Income (Loss) to Common Stockholders | 13.4 | (13.3) | Turnaround | | EPS (basic) ($) | 0.50 | (0.73) | Turnaround | Consolidated Cash Position | Date | Consolidated Cash & Equivalents ($M) | | :--- | :--- | | June 30, 2025 | 74.4 | | December 31, 2024 | 57.3 | - The turnaround to net income was primarily driven by a $27.1 million gain from the deconsolidation of the Checkpoint subsidiary following its acquisition by Sun Pharma[20] Consolidated Financial Statements The consolidated financial statements detail the company's financial position as of June 30, 2025, and performance for the three and six months then ended, showing increased total assets and a shift from stockholders' deficit to equity due to the Checkpoint transaction Condensed Consolidated Balance Sheets As of June 30, 2025, Fortress reported total assets of $159.9 million and total liabilities of $122.5 million, resulting in total stockholders' equity of $37.4 million, a significant improvement from a $1.6 million deficit at year-end 2024 Balance Sheet Summary ($ in thousands) | Metric | June 30, 2025 (Thousands $) | Dec 31, 2024 (Thousands $) | | :--- | :--- | :--- | | Cash and cash equivalents | 74,386 | 57,263 | | Total Assets | 159,895 | 144,223 | | Total Liabilities | 122,512 | 145,867 | | Total Stockholders' Equity (Deficit) | 37,383 | (1,644) | Condensed Consolidated Statements of Operations For Q2 2025, Fortress reported net revenue of $16.4 million and net income of $13.4 million ($0.50 per basic share), a significant improvement from a $13.3 million net loss in Q2 2024, primarily due to a $27.1 million gain from subsidiary deconsolidation Statement of Operations Summary (Three Months Ended June 30, $ in thousands) | Metric | 2025 (Thousands $) | 2024 (Thousands $) | | :--- | :--- | :--- | | Net Revenue | 16,413 | 14,896 | | Loss from Operations | (36,473) | (27,788) | | Gain from deconsolidation of subsidiary | 27,127 | 0 | | Net Income (Loss) to Common Stockholders | 13,355 | (13,339) | | EPS - basic ($) | 0.50 | (0.73) |